Asbury Automotive Group Inc (ABG)

Financial leverage ratio

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Total assets	US$ in thousands	10,159,400	8,255,000	8,165,900	8,182,800	8,021,400	7,816,300	7,638,800	7,860,100	8,002,600	3,571,400	3,524,900	3,582,300	3,676,300	3,530,600	2,934,400	3,069,200	2,911,300	2,816,500	2,814,000	2,904,900
Total stockholders’ equity	US$ in thousands	3,244,100	3,248,500	3,068,600	3,049,200	2,903,500	2,642,900	2,410,400	2,182,500	2,115,500	1,301,300	1,148,300	998,000	905,500	811,900	713,100	660,900	646,300	600,000	556,300	504,600
Financial leverage ratio		3.13	2.54	2.66	2.68	2.76	2.96	3.17	3.60	3.78	2.74	3.07	3.59	4.06	4.35	4.11	4.64	4.50	4.69	5.06	5.76

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $10,159,400K ÷ $3,244,100K
= 3.13

The financial leverage ratio measures the extent to which a company relies on debt financing to support its operations and growth. A higher ratio indicates higher financial risk due to increased debt levels, while a lower ratio implies a lower reliance on debt funding.

Analyzing the financial leverage ratio of Asbury Automotive Group Inc over the past eight quarters reveals fluctuations in the company's leverage position. The ratio ranged from 2.54 to 3.60 during this period, indicating varying degrees of debt utilization.

In the most recent quarter, Q4 2023, the financial leverage ratio decreased to 3.13 from 2.54 in Q3 2023. This suggests that the company reduced its dependence on debt relative to its equity in the latest period, potentially improving its financial stability and risk profile.

While the company's leverage ratio has shown some volatility in recent quarters, it has generally trended downwards since Q1 2022, where it peaked at 3.60. This declining trend may imply that Asbury Automotive Group Inc is actively managing its debt levels to achieve a more balanced capital structure and mitigate financial risks.

Overall, monitoring the financial leverage ratio over time provides valuable insights into Asbury Automotive Group Inc's capital structure decisions and financial risk management strategies. Investors and stakeholders can use this information to assess the company's ability to meet its financial obligations and navigate potential economic challenges.